Kevin Smith Explains Why He Had To Waste $9,316 On Movie Ads That He Didn't Want Or Need

from the the-broken-system dept

We've been covering for a while entertainer Kevin Smith's business model experiments, which rely heavily on his wonderful ability to connect with fans. We've also been fascinated with his more recent decisions to buck "the old way" of doing things and to focus on marketing his latest film, Red State, in a way that he thought made more sense. So far, that's meant a very cool (and quite profitable) plan for Smith to tour with Red State and to combine his usual (wonderful) Q&A sessions with showings of the film. Another part of the plan is getting the film out there in as convenient a way as possible, meaning a video on demand release before the wider theatrical release.

One of the key points of this plan was that he wasn't going to fall into the trap of wasting money on advertising. So far, everything that he's done has been built off of word of mouth -- in large part from his Twitter feed and his growing network of podcasts (I used to listen to nearly all of them, but can't keep up any more). And it's worked out great. Crowds continue to flock to see him, and the movie is getting plenty of buzz among the folks its targeted at. However, he's finally made an exception to the "no advertising" rule, though he's somewhat annoyed that he had to do this. If you've heard him speak about Red State, you've heard him talk about a few of the top notch performances that came out of the film, and Smith and some others think that perhaps some of those performances are "Oscar-worthy." But... the Motion Picture Academy is not known for changing with the times or being willing to adapt to the way films are watched these days. So it "requires" certain things to happen to have a movie "qualify" for the Academy Awards, and that apparently includes a week's worth of screenings at a "real" theater... and newspaper advertising. Why? Who the hell knows. Just don't question the Academy.

Per the AMPAS rules that govern the qualification for the Oscars, paid ads needed to run in conjunction with a seven day, official theatrical engagement. This was a bitter pill to swallow, as we’ve sold lots of Red State tickets all year long without running a single paid ad. But a rule’s a rule, so after the AMPAS folks signed off on the New Beverly for the home of our Los Angeles run, we spent $9,316 on newspaper ads.

It still makes me queasy – solely because it’s money not well-spent. We’d sold out all of our weekend screenings before the ad ever ran in either of the three papers we bought space in: the LA Weekly (six inch ad), the LA Times (same), and the west coast edition of the NY Times (1/2 page ad).

Comparing the take on various live showings that he's been doing, Smith notes that two shows he did last week in Texas basically "covered" the cost of the ads, which seems pretty silly. You're supposed to be advertising to make more money, not making money to pay for the ads you don't want. But such is the legacy structure of the movie industry these days.

Separately, we greatly appreciate the fact that Smith is willing to be so open about the financial results, which helps give more people the details needed to understand how these industries work. It's so rare that people doing these kinds of experiments are willing to reveal any numbers, so it's refreshing to see him being so open. The only thing that would be even better is if he could also open up about some of the costs, so we can get a better idea of the net results, rather than just the gross. Obviously, the theater takes a cut of some of this stuff, and that would be useful for others contemplating following in his footsteps. But, still it's great to see this kind of openness:

we ran the flick for a week at Quentin Tarantino’s New Beverly Cinema in Los Angeles (big thanks to Julia!), where we did two screenings a night, which I followed with 30 minute Q&A’s. Tickets were $20 for the Friday to Wednesday screenings and were followed by post-show Q&A’s with Fatty McNoFly, scourge of the skies.

Since few movie sites ever wanna include us in their box office wrap-up pieces (nor mention that we had the highest per screen average for the last two weeks), here’s the financials for how Red State performed that week…

On Thursday, I didn’t Q&A after the screenings at all, as per AMPAS rules (regarding leaving filmmaker-free screenings open for Academy members so they can watch the flick without influence). Thursday’s ticket price was only $7 for the movie only ($7 is the normal New Beverly admission price, although usually that’s for a non-first-run double-feature). Even that did solid numbers…

Of the 2,675 seats available from Friday to Wednesday, we sold 2,580. From Friday to Wednesday, over the course of twelve screenings, merely 95 seats ever sat empty. Had our start time been 7:30 each night, we likely would’ve sold those seats as well (it’s a bitch getting anybody out in L.A., let alone at 6:30 at night; folks are still getting home from work).

Ah, but isn't the movie industry dying? That's what the MPAA keeps telling us. And yet, if you connect with fans and give them a real reason to buy, it seems they don't mind buying... Shocking, I know...

Re: Re: Re: Re:

Oscar

If the $9,316 results in an important Oscar, you can't buy that kind of publicity. I wouldn't worry about the loss. I'm sure it'll be written off in the taxes. However, is this the first time that Hollywood accounting was displayed in the moment? That's what I'd call transparency!

Re: Oscar

Re: Oscar

Well, you might not worry about it, and Kevin Smith probably isn't really going to miss that money....but that's the price of a new KIA isn't it? If the film is good enough to win an Oscar, isn't it the same quality film regardless of how much money was spent on advertisements? Hell, if that had been donated to the right charity, it likely could have fed a whole African family for nearly a year, spent on something they didn't want to spend it on...and for what? An unreasonable rule, probably created when newspapers gave a huge chunk of start up money to the AMPAS under the condition that they get a little bit back for every movie reviewed... Is racketeering the right word??

Re: Oscar

In pure financial terms, no it's not a big loss and could lead to great returns if successful.

However, this highlights a major point. It shows how stuck in the past some parts of the movie industry are - not only do they have to have a certain type of theatrical showing, they also have to use certain types of advertising. Neither of these are necessary to distribute a movie any longer, yet a movie won't even be considered for an Oscar without them. It highlights the mentality of some in the industry, which is decades behind reality.

I do agree with you about the accounting side, however. I'd love to see real figures for some movies, especially those where people have been cheated out of royalties or where they have inevitably made millions in the "long tail". I get the feeling that if people were able to view the ongoing profits for movies that were considered "flops" in their day but have become popular evergreen classics later on (e.g. Blade Runner, The Thing), then they wouldn't be so quick to judge everything on opening weekend...

Re: Why does Smith care about an Oscar?

Smith has nothing against the hollywood / industry structure actually, he doesn't "reject" the structure of the industry, he just didn't think it would work well for his movie and the industry has nothing against him either, (according to what he said in the Q.A. I went to).

Re: Re:

To whom is it important that the film be qualified for the Oscars?

And fixed again...your rewording just hurt. =]

Obviously Kevin Smith went through all this trouble so the actors in his film have a shot at an Oscar. It probably won't help Smith much unless he gains more publicity for it. Of course, with his antics of revealing all these numbers I am sure the AMPA will likely overlook his film.

Kevin Smith is so awesome...

I can't wait to give my money to Kevin Smith. He has now established himself as a role model for the 21st century artist. I hope that in the end this approach makes him filthy rich. As long as his writing continues to hold up I intend to help make that happen...

You could write an entire essay on why an endorsement from Quentin Tarantino is so significant and what that means for the future of lesser/unknown artists attempting similar strategies.

A possible explanation?

"But... the Motion Picture Academy is not known for changing with the times or being willing to adapt to the way films are watched these days. So it "requires" certain things to happen to have a movie "qualify" for the Academy Awards, and that apparently includes a week's worth of screenings at a "real" theater... and newspaper advertising. Why? Who the hell knows"

I recall some information that Paramount pictures used to own movie theaters. As Sehlat puts it, whatever the customer wanted, the movie makers would produce. Now, there's a disconnect between movie studio, movie theater, and consumers.

I find it very doubtful that the movie industry has changed much in the last 50 years. It's taken until this new millenium to have a ratings system favorable to independents. The major studios still have yet to set up a service for streaming media that's available for consumers. What I mean is, if the rules for the MPAA organizations have a very top-down structure, so would the award systems.

This means the Academy takes cues and remains intent on older structures of doing business. I would think, in years past, the movie studios did heavy advertising to promote new movies in their theaters. It would make sense to advertise heavily. But now, with all of the ways to advertise without a lot of money involved, it doesn't make sense.

Re: A possible explanation?

I recall some information that Paramount pictures used to own movie theaters. As Sehlat puts it, whatever the customer wanted, the movie makers would produce. Now, there's a disconnect between movie studio, movie theater, and consumers.

Anti-trust laws put an end to studio ownership of theaters.

The major studios still have yet to set up a service for streaming media that's available for consumers.

At the end of the day, Smith is making a pittance in this manner. If that's his choice, so be it. But what he's doing doesn't seem like a way to receive a decent return on investment. Unlike many filmmakers who are not as wealthy as Smith, they actually need to seek a greater return than Smith does with his hobby-style filmmaking. Also, though I haven't seen the film, I doubt it has many expensive bells and whistles and expensive talent. Also, being successful and wealthy, he has the luxury of easy access to capital and enough of a rep so he doesn't get much real creative oversight. This isn't something afforded new filmmakers and Smith had to earn his stripes making films using the conventional model. So all of these fanciful, utopian business models sound good on paper but in practice are seldom practical

Re: Re: A possible explanation?

Point taken, but it seems they're killing Hulu for competing in a different market instead of offering an actual service, provided by each company, individually.

" But what he's doing doesn't seem like a way to receive a decent return on investment. "

As compared to...?

"Unlike many filmmakers who are not as wealthy as Smith, they actually need to seek a greater return than Smith does with his hobby-style filmmaking"

Um... What? Kevin made sure to not get sucked into MPAA Accounting. So if he does this, has already made his money back, and other film makers are in debt to the studios, who's come out on top?

"Also, though I haven't seen the film, I doubt it has many expensive bells and whistles and expensive talent."

Are you sure? I'd recheck the IMDB on this because you might be surprised.

" Also, being successful and wealthy, he has the luxury of easy access to capital and enough of a rep so he doesn't get much real creative oversight."

Stop. You're really not understanding when he made his Sundance speech and talked about the problems of the movie industry. Unless you've seen that 30 minute video, displaying why he chose not to sell his movie and decided to make this one for 4 million dollars and not sell it out to the highest bidder, then I believe your message is truly flawed.

Re: Re: A possible explanation?

At the end of the day, Smith is making a pittance in this manner. If that's his choice, so be it. But what he's doing doesn't seem like a way to receive a decent return on investment. Unlike many filmmakers who are not as wealthy as Smith, they actually need to seek a greater return than Smith does with his hobby-style filmmaking. Also, though I haven't seen the film, I doubt it has many expensive bells and whistles and expensive talent. Also, being successful and wealthy, he has the luxury of easy access to capital and enough of a rep so he doesn't get much real creative oversight. This isn't something afforded new filmmakers and Smith had to earn his stripes making films using the conventional model. So all of these fanciful, utopian business models sound good on paper but in practice are seldom practical

Almost everything in this paragraph is wrong. It's stunning. Let's walk through it.

At the end of the day, Smith is making a pittance in this manner.

False. Most films take years to be profitable. Smith's film is profitable before it's even *opened* and every dollar they earn from here on out is *pure profit*, which Smith personally gets to keep a decent chunk of. He'll end up making more off of Red State than many of his other films.

But what he's doing doesn't seem like a way to receive a decent return on investment.

Crazy. The ROI on almost every film is negative. Smith's is already positive before it's opened. To say that's not a decent ROI is crazy and/or ignorant.

Unlike many filmmakers who are not as wealthy as Smith, they actually need to seek a greater return than Smith does with his hobby-style filmmaking.

Once again, false. Most filmmakers never make money off their films -- especially indie films. Yet here Smith's film is profitable and he's going to make a ton off of it. Trust me, the numbers show anything but "hobby-style."

Also, though I haven't seen the film, I doubt it has many expensive bells and whistles and expensive talent.

John Goodman? Kevin Pollak? Melissa Leo (just won an Oscar)? Ignorance ignorance and more ignorance.

Also, being successful and wealthy, he has the luxury of easy access to capital and enough of a rep so he doesn't get much real creative oversight.

Again false. While Smith has been successful with dopey comedies, this is a horror film that no one wanted to fund. It took him four years to raise the cash for it. So... totally false.

This isn't something afforded new filmmakers and Smith had to earn his stripes making films using the conventional model.

Which, again, didn't help much at all here.

So all of these fanciful, utopian business models sound good on paper but in practice are seldom practical

Hilarious. You speak from ignorance. And I've never said that this *exact* model is the one everyone should use. Just that you can learn from the general aspect of what Smith did: find an audience and connect with them. From there, the rest is easy.

The $4 million is spent. These gross numbers don't account for prints and ads, the theater's cut, interest, residuals, etc. How can you say it's profitable until the costs incurred are recovered? Maybe if Smith (like pirates) had no fixed costs, then "every dollar they earn from here on out is *pure profit*".

Re: Re: Re: Re: A possible explanation?

You haven't read properly, have you? Check what Mike wrote in the article again. You'll notice he ran NO ADS. And if you read carefully and check the references Smith has been profiting already. IMDB IGNORES other types of sales.

Re: Re: Re: Re: A possible explanation?

Sigh... the film is touring with Smith himself. How many prints do you think are needed. As for advertising, you don't understand what's actually going on here, do you? The *entire point* of this whole exercise is to bypass the studios need to spend an extra $20 million on ads...

I'll accept theatre cut, but the movie had already grossed $800k by April by your own figures. Given that the movie hasn't even opened yet, why is this a bad thing? I don't know if the other things you mention are a major cost, or if they apply at all. I suspect that neither do you.

Besides, why don't you supply more recent figures if you're going to use figures to attack Mike? Figures from 4 months ago don't cut it, sorry. You just make yourself look foolish, lazy or probably both. Especially when you start blathering on about "piracy" again, even as we discuss a filmmaker who's building a business that such things don't affect.

Re: Re: Re: Re: Re: A possible explanation?

Besides, why don't you supply more recent figures if you're going to use figures to attack Mike? Figures from 4 months ago don't cut it, sorry. You just make yourself look foolish, lazy or probably both.

Perhaps you have some more recent revenue figures. I used the only ones I had available. Actually I'd guess that there's been a greater drop off since then.

Especially when you start blathering on about "piracy" again, even as we discuss a filmmaker who's building a business that such things don't affect.

An average (Hollywood model) film derives 75% of it's total revenue from downstream sources (other than N. American box office). It's just a matter of time his film is stolen and monetized by people who don't have to worry about recouping the initial $4 million investment and have no on-going obligation to pay residuals.

Re: Re: Re: Re: Re: Re: A possible explanation?

"An average (Hollywood model) film derives 75% of it's total revenue from downstream sources (other than N. American box office). It's just a matter of time his film is stolen and monetized by people who don't have to worry about recouping the initial $4 million investment and have no on-going obligation to pay residuals"

You're not getting it... He's already made the $4 million back. He's already paid it off. The rest is pure profit and gravy. The tickets sell for MORE when Smith is there in the theater. Kevin Smith is touring with the movie. He does QA with it. He twitters and answers questions. People can post that up on Youtube.

He is not limiting what people can do at all. They talk about the movie, more people want to see it. Why are you deliberately being shady about your ignorance of what he's accomplishing?

Smith recognizes that some people will file share and he's not against that, because he knows it'll lead to more converts who down the road are willing to pay for other stuff, whether its live shows, new movies, comic books, or his new Smodcost offering.

Re: Re: A possible explanation?

Re: Re: A possible explanation?

Mike's already covered this, but it's worth point out the totally false assumption you're apparently resting on, which is that he would be somehow make much more money through the studio system.

The best example is Smith's first film Clerks. It was shot for just $30,000, reached $230,000 budget during post with studio additions (mainly music rights I believe) and grossed over $3 million at the box office before becoming a cult video hit (http://en.wikipedia.org/wiki/Clerks).

Yet, it apparently took SEVEN YEARS to make a profit! (http://www.indiewire.com/article/sundance_10_critics_notebook_kevin_smith_red_state_and_the_festiva l_spectac/). Either there's some great Hollywood accounting going on there to keep money going into certain peoples' pockets, or it's difficult to make a profit even on a $30,000 movie. How would Smith had been better off with Hollywood on the $4 million Red State, considering it's ALREADY profitable right now?

Re: Re: A possible explanation?

Unlike many filmmakers who are not as wealthy as Smith, they actually need to seek a greater return than Smith does with his hobby-style filmmaking.

a lot of releases spend as much on marketing as they do on the actual film. by not running ads, smith found a way to significantly cut his costs.

Also, though I haven't seen the film, I doubt it has many expensive bells and whistles and expensive talent.

again, that's how you cut costs. the lower your costs, the sooner you hit the break even point, and the easier it becomes to turn a profit.

lower costs are how you adapt your product to compete in an era of digital distribution.

he has the luxury of easy access to capital and enough of a rep so he doesn't get much real creative oversight.

"creative oversight" comes into play when you need a lot of money to make a film. again, lowering costs means you have to make fewer deals with the devil to make your film.

Smith had to earn his stripes making films using the conventional model.

smith started making films in the early 90's, before the web hit critical mass. the conventional model was really the only model. new film makers have access to all sorts of alternative methods of promotion, distribution, and financing.

today it's entirely possible to fund, create, promote, and distribute a film entirely outside of the film establishment. that means more film, and more choice for consumers which is always a good thing.

Re: Re: Re: A possible explanation?

I know everyone's answered including myself, but here's the Sundance speech, where he details the problems of Clerks (as described by PaulT) and a few ideas on how he wanted to fund and promote the movie.

I'd like to also submit the fact that the MPAA organizations spend hugely on advertisements. Advertising for people that won't want to watch the movie. Mike has talked about this at length in other articles.

...discussing how the major studios "buy" an opening weekend gross number, knowing that if you just spend $x million on TV advertising, you can pretty much guarantee a certain level of turnout for a film. However, in many cases, it's really a waste of money, because the money spent on the TV advertising can actually outweigh the value of the people they bring to the theaters (Smith has a funny story about studios advertising some of his movies on Lifetime, the "women-focused" TV station, whose demographics don't match at all with Smith's standard audience).

So essentially, all the advertisements that go into this movie are someone else's idea of what the movie is. *THIS* is the problem with the movie industry. It's so large and so bureaucratic, it can't change to a system that works for individual artists or movie makers. It works to protect the ideas of those entrenched in the system. It's what's so frustrating about going to the MPAA website or affiliates who use this entirely huge propaganda campaign. It's never been about artists. The conventional model is only to sustain the studios. The big Four don't push out creativity. They push out the same product making enough money to sustain itself.

How can any business continue to push out the same thing, hoping for larger profits, if they never try anything new?

Re: Re: Re: Re: A possible explanation?

i get that. that was also in 1994, prior to the internet reaching critical mass among consumers. in those days, television was king for promoting something. today, TV advertisements almost never reach me.

I'd like to also submit the fact that the MPAA organizations spend hugely on advertisements. Advertising for people that won't want to watch the movie.

i'll see your point, and raise you two:

1) there are films that i haven't seen simply because i have seen too many advertisements for them. as in, i can see any movie i want, for free, on the device of my choosing, and i still won't see it because my desire to see the film has been burned by the media blitz.

2) the one size fits all, marketed to within an inch of its life approach to film virtually guarantees that it will be pirated on a large scale. now i just go to my favorite torrent tracker, sort the list of films by their number of seeds, and start downloading.

maybe if the film establishment didn't throw money away, it wouldn't take a decade to recoup the investment made on a film like clerks.

Re: Re: A possible explanation?

At the end of the day, Smith is making a pittance in this manner. If that's his choice, so be it.

Not everyone needs (or in some cases even want) to be insanely rich multimillionaires. A large majority of people, if given a choice, would be more than happy to make a movie or two (or a book or an album) and be able to make say a $40,000 profit than have to stock shelves at Walmart or scrub toilets for a cleaning service for $8 an hour.

Also, though I haven't seen the film, I doubt it has many expensive bells and whistles and expensive talent

Bells and whistles are cool (and tend to be the huge money makers), but not all movies need bells and whistles to be very profitable.
Clerks was cobbled together for for like $26,000 and make something like $3 million.
Clerks 2 had a budget of I think $5 and made $25 million.
Both quite profitable returns on investment.
Paranormal activity, while not a Smith film, cost $15,000 and made almost $200 million worldwide (and therefore means we'll probably see about a dozen sequels).

This isn't something afforded new filmmakers and Smith had to earn his stripes making films using the conventional model.

And he's using his success and reputation to find new models and open new doors for others to use. This isn't about finding ways to make people rich (although it could increase their odds having the next Clerks or Paranormal Activity), but mostly about ways for people just to earn a decent standard of living.

Advertising is a terrible criteria to qualify a film. If you made a film and release it commercially to a audiences in a certain number of theaters shouldn't that qualify as a serious film? Maybe set a minimum number of ticket sales or something. All of that seems way more relevant than whether or not you have paid advertising.

Re: Didn't Sell Out

Yup because having about 40 seats for a 630p showing and about 25 seats at 9pm is doing really terrible on a Thursday night. Selling almost 200 seats both nights is full of people not caring at all about his movies.

People care about Kevin Smith because of his movies, he and his movies have huge followings and when he does something a lot of people pay attention.

Re:

That's one assumption (which you go to as though it were the truth, because complex reality scares you).

In truth, there's numerous other factors. At this particular theatre, was this a good showing for a movie, or a bad one? How many of the people who would normally have paid $7 simply paid $20 instead, leaving those paying $7 as gravy to the main gig? Would all of the people paying $20 have turned up anyway to see the movie anyway? Was the reason why attendance was so low on the Thursday because those who wanted to see the film had already done so? Would the figures have been different if the non-Q&A screening had taken place on the opening Friday? How many of those people paying $7 had already seen the movie but returned for a second viewing?

Nobody knows, but you pretend you do. This is why you're such a poor debater and you're normally mistaken about major facts.

Re: Re:

Paul, it is wonderful but beyond the point.

If everyone who had seen the movie had already seen it, that in itself bodes poorly for Mr Smith. They only sold a little over 2500 tickets Los Angeles with the director speaking (95 empties, or 96% attendance when he was there, and 85% when he was not.

What is most telling is the last night of Q&A, they over sold. The next day, they can't sell the room out for either showing of the movie stand alone.

Oh and Eejit, Kevin Smith making 50k in a week isn't exactly impressive. On a 4 million dollar film, he would have to be spanking that monkey for a year and a half to even break even on this business model, and use up all of his personal time to do it. It's not exactly a winning formula.

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Because huge numbers are what matter right? If there aren't mind boggling numbers in the hundreds of millions lvl then any movie should be dismissed, right? Because if he didn't get the money invested back in the first weekend the movie is showing is bad, right? Because the other ways to get to the movie besides the cinema are just rubbish money that shouldn't be accounted, right?

Re: Re: Re:

Ah, yet again with the "I know best" crap. Yet, you work on assumptions from a pre-determined conclusion, not actual facts.

Again, the important point is how this compares with a normal film release. We're talking about a single screen at a single theatre. Was this more or less than attendance for any other film on a Thursday night at that theatre?

According to boxofficemojo.com, even the #1 film in the US last Thursday (The Help) had a per-screen average of just $989. Using the $7 ticket price as an assumption, that's an average of 141 people for the most popular film in the US. That's a daily figure.

Yet, you assert that a per-screen average of 183 people per *showing* rather than per day somehow means his film is in trouble. I'm sorry, your facts do not convince.

"Kevin Smith making 50k in a week isn't exactly impressive."

The film hasn't been released yet and it's already in profit. We're talking about single screen, single theatre showings as well. Try educating yourself on how the industry works, and you'll see that's actually pretty good. Unless, of course, you can present facts that prove my assertions wrong.

Once again, you assert that something won't work or isn't working based on nothing more than your irrational dislike of Masnick. This is not a good debating tactic.

Re: Re: Re: Re:

Paul, I only compare "previous 6 days with Kevin" to "1 day without Kevin". It's pretty quantifiable, it's a pretty good sampling.

After all, Thursday is not the deadest day for movies, that is typically monday or tuesday, which is why many theaters run half price tickets on those days.

You said: "The film hasn't been released yet and it's already in profit"

Me: Please show me that again without using Mike logic, okay?

Remember, it has "grossed 800k by April", you direct quote, but how much of that is "Kevin Smith is appearing live" and how much of it is "Great movie to go see"?

Put another way, if Kevin Smith didn't make the movie, and just toured around for a year doing a speaking tour (and he could do plenty of events, almost every college or university town with a few stoners or comic book fans on campus would do) and make as much if not more doing it.

So when you look at it, how much did the movie really make? How much is attributable to the presence of Kevin Smith to answer questions?

If you want to talk business models, you need to first decide what is actually being sold. When the movie stands alone (without Kevin Smith) it appears not to draw very well compared to the movie with Kevin Smith speaking, at almost 3 times the price.

Oh, as for your numbers for The Help, consider that, at $2,640,369 of income for the day, and at $7 a ticket (if you want to play the same) it was seen by slightly more than 377,000 people, or, umm, around 2000 times more people than saw Smith's movie.

See, Smiths movie was in one place, promoted in the papers (much to his shagrin), at a very high profile and exclusive venue, and well, in all of LA, in all of the socal area, there were not enough people to fill 215 seats.

That says a lot.

As for my "irrational dislike of Masnick", here you fail as well. My dislike isn't of Masnick (the person) but rather, the way in which this site works to "reframe the truth", fox news style (and I disagree with them too...). As an example, right now today, there are two big stories out there: Wikileaks screwing up and the whole US file getting out with no redactions, and the ruling against Hotfile. Since neither of those play well to Mike's view of the universe, we either won't see them here, or they will be presented with so much spin that most of us will get dizzy reading them.

Instead, today we are chatting about the king of thailand and naked teachers. Impressive! So my " irrational dislike of Masnick" isn't irrational, it isn't personal, but it sure is spot on.

Re: Re: Re: Re: Re:

"It's pretty quantifiable, it's a pretty good sampling."

Not really. That's why I went on to compare with other films. Of course a movie with a Q&A from the director is going to make more than a non-Q&A screening - that's the scarce goods in action. This proves nothing about the film's long term prospects, however.

But, you go from this to assert that since the film is not as popular without the Q&A, thus it is doomed to failure. It's a pretty big leap to make, which is why I continued to compare it with other movies - and your assertion proves lacking.

"Put another way, if Kevin Smith didn't make the movie, and just toured around for a year doing a speaking tour (and he could do plenty of events, almost every college or university town with a few stoners or comic book fans on campus would do) and make as much if not more doing it."

Another bare, unfounded assumption which try to you present as truth. Unless you have comparable figures on Smith's previous Q&As, you're pulling this out of your ass.

"So when you look at it, how much did the movie really make? How much is attributable to the presence of Kevin Smith to answer questions?"

Why don't we wait until the movie is actually released to answer that question?

"That says a lot."

Not really.

"the way in which this site works to "reframe the truth", fox news style"

Dissenting opinions are welcome. We just demand a higher level of debate than "I don't like it so it must be false" and "anyone who disagrees with the status quo must be a pirate", which is sadly all we tend to get. If everybody seems to be attacking you for holding a view, perhaps it is your view (or method of arguing said view) that's the problem, not the people here?

"Since neither of those play well to Mike's view of the universe, we either won't see them here"

As for the Hotfile ruling, I'm sure there will be an article at some point (remember, this is an opinion blog, not a breaking news service). If not, it might be because there's not much to say that's not already been said ad infinitum.

So, no, there doesn't seem to be a great deal to your anti-TD views apart from the fact that an opinion blog hasn't covered a single story as quickly as you'd like. Which isn't a great platform to start from.

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Ahh, Paul, you try so hard.

For the speaking tour, I only have to look at the net difference in both ticket prices and attendance to the "movie with Q&A" versus "movie without Kevin Smith". He can charge 3 times more when he is there, and packs the rooms (oversold, actually in one case). The very next day, the movie alone doesn't fill the room. Good crowd, but not full.

When you consider that there was only one single source outlet for this movie on that day, and that we are only talking 215 seats, and considering that the previous "with Kevin Smith" nights had sold out, we can draw two probably conclusions:

1) People pay for Kevin Smith. They paid 3 times as much for with Kevin as compared to without, and

2) People were not as interested in the movie alone, even at 1/3 of the price.

Those are two facts we can draw.

Then we look at Kevin Smith's history of speaking and speaking tours. He makes plenty of money every year from speaking engagements (he is very popular with certain crowds, it seems). Considering the above facts (see 1 and 2), I would say that if Kevin Smith had come to LA, set up in a 1000 seat room, and charged $20 a head to get in, it would have sold out, and that would require no movie to do it.

So did he need a $4,000,000 movie to attract a crowd? Apparently not.

As for "should we wait until the movie is released", it's a little late. According to IMDB, the movie is pretty much going to be "direct to DVD" on October 18th, and is already running on VOD systems (if any picked it up).

So if you are waiting to see it in your local multiplex, you will apparently be waiting a very long time.

As for Mike, the "wikileaks" story was not very informative, and there is plenty more out there that isn't in his story. Clearly this has become a very important story, and could be the final chapter of Wikileaks before it goes down entirely. Clearly anyone providing information to them is no longer safe, they are no more able to control information than the very governments they mock for lax security.

The Hotfile ruling is massive. It's huge. It's a major, major attack on the "what's next" of piracy, cyberlockers. It potentially addresses the old "red flag" issue on violating material as well, and could possibly toss the entire "free hosting for your pirated movies" model out the window. I am surprised that in 2 days, Mike hasn't even alluded to it. It almost looks like he doesn't want to talk about it, or that he has yet to find a way to spin it to make it look like a victory.

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"Those are two facts we can draw."

No, those are 2 *assumptions* that can be drawn. You seem to get those things mixed up.

There's also many more than 2 things that can be taken from this, but I presume you'll ignore them if they're inconvenient to your narrative. Funny, I thought that was the type of this that offended you about Mike, yet here you are doing the same thing.

"So did he need a $4,000,000 movie to attract a crowd? Apparently not."

No, but he did need the crowd for the Q&As to help promote the movie. You seem to have this completely backward.

"As for "should we wait until the movie is released", it's a little late. According to IMDB, the movie is pretty much going to be "direct to DVD" on October 18th, and is already running on VOD systems (if any picked it up)."

I suggest you learn to use IMDB properly in that case. If I go to the Red State page, there's a large yellow banner across the top that says "Coming Soon. In theaters September 22.". I'm not sure why this information isn't repeated on the release dates page, but every other site I checked, ranging from Variety to Wikipedia, confirms this theatrical release.

Try depending on more than one source for research. It makes you look rather silly.

"So if you are waiting to see it in your local multiplex, you will apparently be waiting a very long time."

Yep, it will probably not appear any time soon at the UGC cinema in Los Barrios, Andalucia, Spain. I'm not sure what that has to do with its US box office prospects, though.

"As for Mike, the "wikileaks" story was not very informative, and there is plenty more out there that isn't in his story."

So, go to that story and enlighten us, preferably with citations. Mike has a history of correcting and even redacting large parts of a story if he's proven wrong. Don't try to pretend the story wasn't commented on, however, as that's demonstrably false.

"The Hotfile ruling is massive. It's huge. It's a major, major attack on the "what's next" of piracy, cyberlockers."

Again, your opinion. The ruling is only a part of the ongoing story, lockers are hardly the only alternative to torrents and have many legal uses, and there's nothing in the story that hasn't already had 100 stories posted this year about it. If I'm wrong, why not enlighten us, or submit the story to Mike (he's been known to post stories he's not interested in if demand is high enough).

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Paul, they are two facts.

People pay more to see Kevin Smith and his movies. They pay less to see just his movies. People are not as interested in the movies alone as they are in Kevin Smith.

Those aren't opinions, they are conclusions drawn from the numbers presented. On any other subject on Techdirt, they would be considered locked in stone facts. The numbers are in front of you, please tell me how they are wrong.

Promotion of the movie is a moot point, because 60 days from now it's on DVD, and in 60days and a few minutes, it's ripped solid and available online for free.

Isn't the point of the infinite good (the movie) to promote the scarce (time with Kevin Smith)? The Q&A doesn't promote the film, it would be incredibly meaningless to promote something that is infinite, wouldn't it?

You said: "Mike has a history of correcting and even redacting large parts of a story if he's proven wrong."

Me: Oh yeah, hmm. Happened about twice in the last few years. Even while Mike is wrong (or guilty of the type of "opinion-facting" that you claim I am doing), he is rarely "wrong". Typos, maybe. Wrong? Almost never.

You said: "gain, your opinion. The ruling is only a part of the ongoing story, lockers are hardly the only alternative to torrents and have many legal uses, and there's nothing in the story that hasn't already had 100 stories posted this year about it. "

Me: You are kidding right? The service was ordered to turn over pretty much everything it has except the source code to it's software, and it is very likely that the MPAA will use the information to (a) show that Hotfile was a knowing participant in piracy for profit, and (b) go after individual uploaders who profited from pirated material.

Potentially, this information could be used for criminal rather than civil cases, as some of the cases may make it to the level of commercial copyright violation.

I would say this hasn't been covered 100 times over. It's a pretty significant situation, but one that Mike doesn't seem to want to talk about.

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"People pay more to see Kevin Smith and his movies. They pay less to see just his movies."

Yes, because they're getting more for their money as they're getting the extra scarce material. That doesn't reflect on the profitability nor the potential popularity of the movie alone.

I've just spent a ridiculous amount of money watching 21 films over 5 days at the Frightfest festival in London. I wouldn't pay anywhere near as much seeing the same films under normal circumstances. That does not detract from the profitability of any of the movies I saw, and in fact I am helping word of mouth to increase profits for those films I enjoyed. By your logic, all those films were a failure.

"Those aren't opinions, they are conclusions drawn from the numbers presented."

They are one set of conclusions, which fall apart when making comparisons to a larger set of data (such as how other movies fare in the same time period on a per-screen basis).

"Promotion of the movie is a moot point, because 60 days from now it's on DVD, and in 60days and a few minutes, it's ripped solid and available online for free."

Again, you seem to be ignoring facts. The promotion is still valid because the promotion drives DVD, PPV and other sales, not just theatrical. And, yet again, you ignore the facts that the movie is ALREADY being torrented, yet neither Smith nor his sales figures seem to be suffering greatly at this point.

Seriously, you just pick one part of the picture and run with it as though it's gospel truth, then whine when you're proven wrong.

"Isn't the point of the infinite good (the movie) to promote the scarce (time with Kevin Smith)?"

No. The movie isn't infinite. A digital copy of said movie is, but the theatrical screening isn't. The physical DVD isn't. Merchandising for the film isn't. Sales to TV, cable, etc. aren't. You do have a habit of simplifying these things so that you're no longer arguing against reality.

"Me: Oh yeah, hmm. Happened about twice in the last few years."

Selective memory does help to save you from facing inconvenient facts, doesn't it?

"Typos, maybe. Wrong? Almost never."

I'd stop throwing those stones in your glass house if I were you. You've deflected from at least 2 places where I've challenged your incorrect assumptions and "facts" that were simply wrong. If you won't admit you got things wrong yourself, why should Mike be held to a higher standard?

"The service was ordered to turn over pretty much everything it has except the source code to it's software"

Which is rather scary and unlikely to yield anything positive, but that's been the subject of every criticism of the MPAA/RIAA's legal efforts on this site for at least the last 5 years. There's nothing new here, and it's an ongoing case.

"Potentially, this information could be used for criminal rather than civil cases, as some of the cases may make it to the level of commercial copyright violation."

It would be nice if such a thing happened as the evidence would be tested in a court with reasonable standards, but it hasn't happened yet.

"I would say this hasn't been covered 100 times over."

Apart from the specifics in this case, I would say it has. But, I can admit our opinions differ. It's just when you try to pretend yours are more "right" or factual than others that I take issue.

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"Which is rather scary and unlikely to yield anything positive, but that's been the subject of every criticism of the MPAA/RIAA's legal efforts on this site for at least the last 5 years. There's nothing new here, and it's an ongoing case."

Small nitpick... The last five years? The MPAA has been having problems since the 90s. When it's not indie that they're crushing under their heel, it's the consumers in trying to find the best way to maximize their profits, rather than giving customers what they want.

"It would be nice if such a thing happened as the evidence would be tested in a court with reasonable standards, but it hasn't happened yet."
These are the same people that run with the RIAA... Do we really want to trust a private business with so much information?

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"The last five years?"

Well, the full quote was "on this site for at least the last 5 years". I know it's been a concern for much longer, but I was referring to specifically what's been said here and I'm not sure how long I've been reading this site on a regular basis.

For my money, the movie industry's been a mess with regard to distribution since at least the dawn of videotape, and it's more blind luck, 3rd party technology and a couple of positive court rulings that drove them there rather than any business savvy.

"Do we really want to trust a private business with so much information?"

Absolutely not. But, since the ruling has already been made then at least I can try to find a silver lining. After all, the RIAA haven't been made to defend their evidence in a non-civil court AFAIK so it will be nice if someone has to, even if it's not pretty considering how it gets there.

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Allowing that our opinions differ, we can both draw different conclusions on things. What you are razzing me here for is the very same techniques that Mike Masnick uses in making many of his points, selectively looking at data and drawing conclusions. I accept it as the way things are done here.

Did I mention it's day 4 without anything to do with Hotfile?

Anyway, as more and more people get nice home theaters and high speed internet connections, the "cinema experience" because less and less appealing. It isn't by itself infinite, but when it competes against the infinite version of itself, it tends to lose. It's one of the reasons why movie "windowing" exists, it is the managing of release to maintain exclusivity and scarcity, and thus maintain a high market price. For me, the release date of a movie is the date it goes to DVD. Everything before that is a "limited engagement" or "limited private screening", you can pay to see the product before it's wide release, or you can wait until it is widely released on DVD. It's up to you.

Piracy however tends to hurt that, giving people an "infinite" option. As that option continues to get more and more attractive, it will likely hurt the movie theater business more. Ticket sales (number of heads) is down and staying down, only pricier tickets make the numbers look good for now, but there is only so much "up" on the ticket price before you start losing again.

As for Hotfile, I do agree with you. I hope evidence is tested in court. I think this is one of those more clear cut situations where there was a direct "for profit" motive that can be explained to a judge or jury, and an example where this profit motive makes it clear as to why people were doing what they were doing. Like I said, this is potentially an explosive case that could blow many piracy based business models out the window.

But, windowing actually encourages piracy. For example, someone wants to watch the latest movie, and can't get to the cinema to watch it? They have 2 options - wait or pirate. Getting rid of the pirate option will not make that person suddenly be able to get to or afford a cinema ticket, and it won't necessarily translate into automatic profit after the wait.

"For me, the release date of a movie is the date it goes to DVD. Everything before that is a "limited engagement""

You know saying "you're right, I got the release date wrong" is a much more believable and honest way to deal with your mistake than this constant squirming and pretending you didn't get it wrong. Redefining the argument to your own terms doesn't make you correct, it just means you're arguing a strawman.

This can be argued both ways, but it's ultimately an assumption. There's no way to measure what someone would have done if an alternative option wasn't available. Some will have paid without piracy, some would not even if piracy was unavailable, some pay more because of a pirated "preview" copy. You can't really measure which group has more overall influence.

"Ticket sales (number of heads) is down and staying down, only pricier tickets make the numbers look good for now, but there is only so much "up" on the ticket price before you start losing again."

Indeed. But, there's no reason for the tickets to constantly rise in the way they have (most of it recently due to the 3D gimmick, which is probably fading). Nor is there a real reason to focus so obsessively on the theatrical component.

The reality is that there's more competition for the entertainment dollar in today's world than ever before, and yet the industry has made more money in the last few years than any others during a major worldwide recession - even with piracy. If they start losing a lot of money, it may be due to their constant failure to adapt and compete (not just with "piracy" but with all other legal options).

This is also a good reason for Smith's experiment to exist - if you can save millions upon millions on advertising and distribution then drops in ticket sales will have less of an adverse effect. Hollywood is a source of incredible waste, and it's expensive. Their failure to deal with that does not necessarily mean they need protecting from outside forces.

"As for Hotfile, I do agree with you."

Then why the constant whining that Mike has chosen other stories to cover, if you agree that there's nothing particularly new to discuss?

"Like I said, this is potentially an explosive case that could blow many piracy based business models out the window."

...but not all of them, and so long as the industry fails to deal with the modern marketplace, there will always be demand for the black market options. As I've said before, this is a simple case of supply and demand. Most of these "piracy based" businesses are simply servicing the areas the industry refuses to service itself. Killing piracy will not mean that these people are suddenly catered for - the industry has to do that as well, else it's wasted effort.

I always thought he was kind of a douche. I always see him complaining about the movies he had no hand in making. He usually picks out the biggest star in the movie, and then rants about why he's an asshole.

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I always thought Jess was kind of a douche. I always see him/her (sorry, not sure) complaining about stories he/she had no hand in making. He/she usually picks out the biggest star in the story, and then rants about why he's an asshole.

PAYWALL!

I think it's funny how people are talking about how he's bucking the studio system. Hogwash. He's just built a smaller studio and he's releasing the film behind a paywall. Normally the kneejerks around here would start screaming "DRM, DRM, DRM", but for some reason Smith is immune to the accusation. Somehow he's connecting with fans and giving them a reason to pay at the theater while a big studio is somehow stuck in the past.

They've got exactly the same business model and they're using the same techniques. What's the big whoop?

Re: PAYWALL!

Nope, you seem to have completely misunderstood,well, everything.

The reason why a paywall is usually considered stupid is because it's taking infinite content and trying to artificially charge for it without adding more value. This is almost always doomed to failure.

Smith is adding extra value via finite goods (the Q&As) and charging for those, not the infinite goods. It's also a temporary tactic that's taking the place of traditional marketing - everything else going on, from PPV to the theatrical release is forthcoming. The only remotely odious thing going on here is windowing, which I will happily criticise Smith for.

As for DRM, that comparison is bizarre. I don't see any artificial restrictions on infinite goods here, nor anything that treats paying customers as criminals. Maybe you could elaborate?

"They've got exactly the same business model and they're using the same techniques."

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Smith is adding extra value via finite goods (the Q&As) and charging for those, not the infinite goods. It's also a temporary tactic that's taking the place of traditional marketing - everything else going on, from PPV to the theatrical release is forthcoming. The only remotely odious thing going on here is windowing, which I will happily criticise Smith for.

Even the windowing isn't entirely bad and may be just a facet of what had to happen as it's difficult to line up everything to go at once. And, already he's changed the plans there. Early on he talked about how he would do VOD well after the theatrical release (standard windowing) and admitted that he knew that was old fashioned and lame, but he was just stuck on that view as an old school filmmaker. But somewhere along the way he changed his mind...

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Gads, you're just blind to everything that Smith does. SO what if he changed the order of which paywall he used when.

The Q&A are not finite goods. He could run them with Twitter or that Google application for collecting questions for a talk. He could put the entire movie up on YouTube for free. But he doesn't.

Nope. He's going with VOD, a TLA that's usually laden with DRM. How do you think they collect the money and try to keep it off the torrent sites? If Smith were really a good example of what you're endorsing here, he would be doing a few of these things. But he's not. He's following the old-school studio recipe perfectly. Everything he's doing is constructing a paywall to try to limit access and charge a price. He's not taking advantage of any of the new systems at all. He's trying to be a studio himself.

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"The Q&A are not finite goods. He could run them with Twitter or that Google application for collecting questions for a talk. He could put the entire movie up on YouTube for free."

OK, please explain how any of this would make the Q&A an infinite good. Hint: the very nature of a Q&A means that the experience is not directly replicable, even if you have a recording of the event afterwards. I can't watch a DVD of the first Evening With Kevin Smith and ask my own questions, no matter how many times I watch it. I have to pay for the finite good to do that, even if the investment is merely time on Twitter.

"Nope. He's going with VOD, a TLA that's usually laden with DRM."

...and he's offering alternatives if you don't want that. A lot of these decisions are also out of his hands (e.g. many theatres would not accept the movie if the DVD was out before the theatrical).

He's not trying to change the world completely, just to prove one assumption (that $20 million of advertising is necessary to sell a $4 million movie). Why criticise him for something he's not trying to do?

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Yeah, he's definitely learning and a great example to anyone in the old frame of thinking. I just wish he'd used the opportunity to do something a little differently on the international front, since all his energy seems to be spent on domestic promotion. I certainly understand that his hands are tied in certain aspects and windowing makes some aspects of his work easier. Oh well, baby steps and all that...

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What may happen is he goes international afterwards. I would think that he wants to go to Europe with the proceeds and do the exact same thing there. If not, then it may make sense to rely on Twitter for the international audience and set up streams for international questions.

VOD Release

It appears that "Red State" will be available beginning today from Amazon, iTunes and others. DVD in October. It'll be interesting to see how long before it's been stolen and monetized by others and whether Smith's Q&A sessions can make up that ground.

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"It appears that "Red State" will be available beginning today from Amazon, iTunes and others. DVD in October."

Which is great, since that means people like myself who can't attend the theatrical screenings and Q&As will be able to see it (assuming it's not regionally restricted). At present, I have no legal means to do so.

"It'll be interesting to see how long before it's been stolen"

*facepalm*

I assume you're referring to "piracy", but a quick Google search will show you it's already available. It's the paying customers who are forced to wait, and as I said before, the windowing is an aspect I'll happily criticise Smith for.

"monetized by others"

*facepalm*

"whether Smith's Q&A sessions can make up that ground."

Why would he still be doing Q&As to promote the film after its DVD release? Wouldn't he be working on his next projects and his podcast network instead? What ground is there to make up after the film has become profitable (which you still not disproved except by making wild assumptions about outdated figures)?

Re: Not for it, not against it

You certainly have a point, which is that this particular experiment *in the way Smith is currently implementing it* isn't going to be viable for every movie.

However, this is merely the first step. Like all such experiments, this isn't meant to be a blueprint that the unimaginative can simply copy. It's more a proof of concept. It's to show that the Hollywood way is not the only way. That there are other ways to make money than battling through the studio system and blowing 4-5 times your production budget on marketing.

Smith has spoken at length about how his inspiration for making movies was seeing Slacker, and realising that a guy like him could just shoot a movie. Hopefully, this will also challenge peoples' perceptions of distribution and inspire new talent in the same way.

I would dispute the claim that the $9316 was totally wasted. If the movie gets any Oscar nominations, that will drive far more than enough business to make that worthwhile. Which is, of course, why he paid it, even if it irritated him (well, either that, or it was pure ego, which I doubt).